Background Conflicting evidence has emerged regarding the relevance of smoking on risk of COVID-19 and its severity. Methods We undertook large-scale observational and Mendelian randomisation (MR) analyses using UK Biobank. Most recent smoking status was determined from primary care records (70.8%) and UK Biobank questionnaire data (29.2%). COVID-19 outcomes were derived from Public Health England SARS-CoV-2 testing data, hospital admissions data, and death certificates (until 18 August 2020). Logistic regression was used to estimate associations between smoking status and confirmed SARS-CoV-2 infection, COVID-19-related hospitalisation, and COVID-19-related death. Inverse variance-weighted MR analyses using established genetic instruments for smoking initiation and smoking heaviness were undertaken (reported per SD increase). Results There were 421 469 eligible participants, 1649 confirmed infections, 968 COVID-19-related hospitalisations and 444 COVID-19-related deaths. Compared with never-smokers, current smokers had higher risks of hospitalisation (OR 1.80, 95% CI 1.26 to 2.29) and mortality (smoking 1–9/day: OR 2.14, 95% CI 0.87 to 5.24; 10–19/day: OR 5.91, 95% CI 3.66 to 9.54; 20+/day: OR 6.11, 95% CI 3.59 to 10.42). In MR analyses of 281 105 White British participants, genetically predicted propensity to initiate smoking was associated with higher risks of infection (OR 1.45, 95% CI 1.10 to 1.91) and hospitalisation (OR 1.60, 95% CI 1.13 to 2.27). Genetically predicted higher number of cigarettes smoked per day was associated with higher risks of all outcomes (infection OR 2.51, 95% CI 1.20 to 5.24; hospitalisation OR 5.08, 95% CI 2.04 to 12.66; and death OR 10.02, 95% CI 2.53 to 39.72). Interpretation Congruent results from two analytical approaches support a causal effect of smoking on risk of severe COVID-19.